Replies to post #609090 on Fannie Mae-No Politics (FNMA)

[kthomp19]

Looks, to me, like JPS gets dismissed, some remnant of par value for years, and common shares SOAR from <$2 to $30+ per share.

If the commons are worth a penny then the prefs are worth par, especially in a restructuring (which a recapitalization is). Any hopes of the commons gaining lots of value while the prefs stay at depressed prices just aren't grounded in reality. Spite, maybe, and certainly common nonsense and wishful thinking, but not reality.

And what does it mean for JPS to get dismissed? In case you didn't notice, most of the existing lawsuits involving plaintiffs that collectively own both classes of shares. Dismissing claims by junior pref shareholders automatically means dismissing those same claims by common shareholders.

That's what Mr. Market seems to be saying.

Nope. If Mr. Market really thought that, the commons wouldn't be languishing under $2, though the juniors at 20% of par would make sense.